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The crazy complexity of the US tax system is worse than it appears. There is a non-linear increase in complexity as one goes up the income scale. Have a few i
by todd8 13y ago
The crazy complexity of the US tax system is worse than it appears. There is a non-linear increase in complexity as one goes up the income scale. Have a few investments? More complexity. Real estate investments? More complexity. Starting a company? Even more complexity. Reasonably diversified individuals that have perhaps sold a company or two can expect a rough time.
One reason the complex system is tolerated is that the people it really hurts are very few. A friend of mine has never been audited and does nothing shady but spends roughly $30,000 on tax accountants every year preparing his returns because they are so complex. Fortunately for the rest of us, we just have to waste an inordinate amount of time with Turbo Tax.
- stephen_g 13y agoIt's not just the complexity. In Australia, we have a ridiculously complicated tax system but the free application that the Australian Taxation Office (ATO) provides walks you through it pretty easily. Usually it only takes me about an hour to file it online, and then you have a return deposited to your bank account (or you get an invoice if you're unlucky) in eight to fifteen days. The UI is pretty crap but on the whole the app works pretty well. It can 'pre-fill' quite a lot - stuff like salary that has been pre-taxed (called the PAYG system here), share dividends and franking information, bank interest details. I wish company tax returns were similarly simple, but those have to go in either on paper or electronically through an accountant.